SESSION 1: REGIONAL TRADE CHOICESChairProfessor Peter Drysdale
The Australian National University

PanelistsProfessor Shujiro Urata
Waseda University, JapanDr. Andrew Elek
The Australian National UniversityDr. Thomas G Aquino
University of Asia and the Pacific, PhilippinesDr. Biswajit Dhar
Research and Information System for Developing Countries, India

Session 2: Changes in the Political and Economic Environment Which Affect FTAs in Asiaa. Overview: Analysis and assessment of factors influencing FTAs and other free trade systems

b. Focused discussions
i. Impact of the EU currency crisis on the economy of the Asia-Pacific region
ii. How to evaluate the impact of recessionary fears on the global economy and on the economy of the Asia-Pacific region
iii. How to evaluate the impact of recent changes in the international political situation involving Japan, China, and South Korea on trade and the economy

- Dr. Thomas G. AQUINO Senior Fellow, Center for Research and Communications, University of Asia and the Pacific (Former Senior Undersecretary, Department of Trade and Industry of the Republic of Philippines)Session 2_FTA as a Growth Strategy for Asia JEF 2013

b. Focused discussions (key issues to influence future prospects)
i. Development of FTAs to assure the stable supply of resources (how to deal with export restrictions) As import liberalization proceeds apace, export restrictions remain in force, giving rise to fears that this key area of regulation will be left behind in the liberalization process.
ii. How to redefine the concept of national borders in trade reform International dumping and domestic dumping should be ideally treated in the same manner.
iii. Fairness in terms of opportunities to participate in FTAs such as the RCEP in the Asia-Pacific Region Will inequality in terms of opportunities act as a negative factor for regional revitalization?

ModeratorMr. Noboru HATAKEYAMA, Chairman and CEO, Japan Economic Foundation (JEF) (Former Vice-Minister for International Affairs, Ministry of International Trade and Industry (MITI (METI as of now)) of Japan)

Good Morning Ladies and Gentlemen. Mr. Nobuhiko SASAKI, Vice-Minister for International Affairs, from the Ministry of Economy, Trade and Industry, speakers present from other countries, Ladies and gentlemen. I would like to welcome you all for participating in the forum. This forum, when I became Chairman of Japan Economic Foundation in 2003, was first held in Singapore as a place to promote FTA discussions in the Asia-Pacific region. Later, this forum has been held taking in turns in different countries and region. This year, we celebrate its 11th forum, now being held in Tokyo jointly with JETRO. In holding this forum, we had cooperation from METI, JETRO and other related organizations. I would like to extend my deepest gratitude for each and every one of these organizations.

Looking at the global economy last year, in Europe, financial crisis caused a lot of uncertainties to the future of global economy. The European financial crisis, as a result of successive measures taken by EU authority, in particular, with the establishment of ESM, European Stability Mechanism in October last year, aimed at strengthening support to the Euro zone, led to the stabilization of the situation. But still the bipolarization between north and south of EU has not yet been resolved. So, the future of the situation in EU is still worth attention.

In the U.S., towards the end of the year, the "fiscal cliff" was a focus of the attention in the world. From the end of the year to the beginning of this year, thanks to the efforts of President Obama and the both parties, "falling from the cliff" was avoided for a while. It was avoided by the two months-extension of budget sequester. However, since this is a provisional "emergency measure", the world is watching what measures will be taken in February which is the end of this extension.

Although the BRICs countries are expected to pull the global economy in the future, Brazilian economy is stagnant and Chinese economy growth is also slowing down. So, what measures would be taken against that is another point of notice.
In case of Japan, as you know, with the establishment of Abe administration, the 2% of inflation target was introduced to overcome deflation. Based on that, "the tree arrows policy" that is fiscal policy, financial policy and growth strategy, will be put in place to vitalize the economy. Market is positively responding to this policy. The prices of stocks are going up and in the foreign exchange market, yen rate is now converting to a more appropriate level. I am also greatly looking forward to this policy.

Now, I want to touch upon Japanese trade which is strongly affected by foreign exchange rate.
Looking at trade balance, Japan recorded a deficit of 2.6 trillion yen, and that of last year was a deficit of 6.9 trillion yen. Weakening of yen is good news for exports from Japan, but, at the same time, it will push up the import value reflecting increased cost of fossil fuel etc.

Under that situation, question is whether it is possible to further expand exports. I believe that active promotion of FTAs with other countries is necessary. Currently, there are more than 220 FTAs enacted in the world. As of the end of November last year, Japan had 13 FTAs with twelve countries and one region. In addition, negotiations are going on with six countries including Australia and Canada. And also, there was an official announcement to start governmental negotiations of Japan-EU and China-Japan-Korea FTAs.
But, when we look at the FTA coverage ratio among total export, it is still 19% in Japan. Compared to the extremely high ratio of Mexico (92%) and of Chile (90%), the ratio of Japan is extremely low. It is even lower compared to 45% of United States and 37% of Korea. Korea is now negotiating FTA with China. When this FTA is realized, I believe the ratio of Korea will further go up.

Currently, we are seeing a slow-down of the global economic growth. Every country is very active in promoting FTA to vitalize their economy. Based on this situation, we would like to have a concentrated discussion on the future of FTAs in the Asia-Pacific region with authorities of FTAs and those actually in charge of negotiations of FTAs from eleven countries and one international organization.

At the 2010 APEC, there was an agreement that TPP, which is now a focus of our attention, and ASEAN + 6 then which is now called "RCEP" should aim at a comprehensive free trade agreement at APEC ultimately. However, when we look at the countries or regions composing the membership, Taiwan is a member of APEC but it is not covered by RCEP. India is under RCEP but is not a member of APEC. So I hope we could have more discussions on this membership issue, too.

I hope the meeting of today will be informative to you in conducting your future businesses.

Session 1 : Role of regional integration in ensuring stable supply of resources (energy, minerals, food, etc.), parts and industrial materials- How can regional integration contribute to ensuring stable supply of resources, including the issue to recover the parts supply chain disrupted by the Great East Japan Earthquake?

-Dr. Thomas G. AQUINO, Senior Fellow, Center for Research and Communications, University of Asia and the Pacific (Former Senior Undersecretary, Department of Trade and Industry of the Republic of Philippines)Presentation(paper)Presentation

Your Excellency Vice President Siew, Honorable Economic Vice Minister Liang, distinguished guests, ladies and gentlemen. As a host of the 10th International Symposium, I would like to heartily welcome all of you here.

I have long looked forward to hosting this symposium in Taiwan. It is a great pleasure for me to have the chance on this momentous 10th occasion on the following day of the 100th anniversary of the Chinese Xinhai Revolution. In organizing this symposium, we received full support from the Taiwan Institute of Economic Research and other related organizations. I would like to extend my deep gratitude to everyone in the authorities who made this possible, in particular to Dr. Hong and Dr. Chan, President and Executive Director of TIER for your kind support.

In addition, I would like to take this opportunity to express our sincere appreciation to the people of Taiwan and the Taiwanese government for your support given to Japan in the wake of the Great East Japan Earthquake on March 11. As you are aware, this calamity with an unprecedented 9.0 magnitude brought unparalleled devastation: So far, around 20,000 people have been found dead or remain missing and property damage caused by the disaster has reached 17 trillion yen .

As of October 5th, Japan received tremendous physical, material and financial support from 163 countries, regions and organizations throughout the world. In particular, Taiwan has provided us a significant amount of material and financial support, including the rescue team immediately dispatched on March 14. This is one of the largest aids amassed for the disaster relief along with America's "Operation Tomodachi" or the "Operation Friends". I would like to reiterate my gratitude to everyone in Taiwan.

Looking at the current world economy, my personal view is that this recession has been continuing since the crisis due to sub-prime loan back in 2007. Apparent economic recoveries in many countries of the world, including Japan, may be just thanks to stimulus packages implemented by them and if the effects of these packages expire, then recoveries may also expire.

Therefore many governments in the world had better continue to stimulate their economies. There are two ways for governments to do so. The first one is to pour money into economies and the second one is to deregulate economies without using money.

Let me start from the first one to use money. This is what many governments have done thus far to cope with this crisis. As the result of this policy, however, many governments in the world have increasingly become poor. Therefore many of them cannot afford to spend fiscal money any longer. Only what they can do in this respect is to rely on their central banks to relax money supply which many countries in this region are doing.

The second way is to deregulate economic activities, trying to rely upon private economies. There are some remaining regulations inheriting just the past vested interests even in the developed economies. If those regulations are lifted, economic activities will increase. For example, even today, it is said Japanese society is not ready to accept robotics in its laws and ordinances. If they are lifted, then the demands for robots will increase tremendously, thereby raising the productivity in aging society. I think it would be difficult to implement deregulation alone. But if it is conducted in the context of FTA it will be a lot easier.

The first meeting of this symposium was held in Singapore in 2003, - Since then, each member country took its turn hosting the event under cooperation with domestic think-tanks and universities in the cities of Bangkok, Manila, Seoul, Jakarta, Beijing, Kuala Lumpur, New Deli and Wellington. As I mentioned earlier, this symposium in Taipei marks the 10th such occasion.

During those eight years, there have been or will be several major developments in terms of FTAs in Asia.

The first is the integration of ASEAN, due to take place in 2015. People around the world are watching developments carefully to see whether integration will be achieved in 2015 as scheduled.

The second major step forward was the start of joint governmental studies at senior official level concerning rules of origin, tariff classifications, custom procedures and economic cooperation within the EAFTA and the CEPEA. As part of these studies, working groups have been established for each FTA.

Third was the summit agreement reached last May to conclude a feasibility study on an FTA between China, Japan and South Korea by the end of this year.

The fourth major step is the TPP, being negotiated last week in Hawaii by nine countries, including the United States and several ASEAN countries.

Fifth is the ECFA, an FTA between China and Taiwan.

And sixth is the major change in the policy of South Korea toward FTAs.

I believe the best way to cope with this long recession without using money is to make use of these FTAs or regional integrations as much as possible

The main theme this time is "Seeking a new balance in Asia-Pacific the regional integration of Asia-Pacific region." In concrete terms, we would like to discuss two topics with participant specialists from major countries in the Asia-Pacific region:

1) The role which regional integrations play in securing energy, mineral and foodstuff resources, as well as industrial parts and materials.
2) The impact, both positive and negative, which newly or soon-to-be concluded FTAs including the ECFA (or China-Taiwan FTA), South Korea-EU FTA and TPP may bring on the existing FTAs in the Asian region.

Through exchange of views on this occasion, I truly hope that all participants go on to share with the world what we have learned here.